General Motors has raised several financial targets for 2024 after exceeding Wall Street’s expectations for its second quarter performance. The automaker has adjusted its anticipated adjusted earnings for the year to a range of $13 billion to $15 billion, up from the previous estimate of $12.5 billion to $14.5 billion. Additionally, GM has increased its forecasts for operating cash flow and earnings per share, although it slightly lowered expectations for net income attributable to shareholders by less than 1%, now estimated to be between $10 billion and $11.4 billion.
In terms of financial performance, GM reported second-quarter revenue of $47.9 billion, which represents an over 7% increase from the previous year and surpasses Wall Street expectations of $45 billion. The company’s earnings per share reached $3.06, exceeding the analysts’ forecast of $2.71 per share and reflecting a 60% increase compared to 2023. Net income also saw a growth of 14%, rising to $2.9 billion from $2.5 billion.
As a result of this positive news, GM’s stock surged nearly 5% in pre-market trading, marking a 37% increase for the year. Additionally, GM declared a third-quarter cash dividend, which further bolstered the stock’s performance.
In a letter to shareholders, CEO Mary Barra highlighted the success of the company’s gas-powered trucks and SUVs, mentioning that GM is in the process of launching eight new or redesigned models in North America. She also noted the ongoing scaling of production for the electric Chevrolet Equinox, emphasizing the company’s commitment to disciplined volume growth despite previous setbacks in electric vehicle production targets.
Earlier this month, Barra acknowledged that GM would not achieve its goal of producing 1 million electric vehicles in North America by the end of 2025 due to a market slowdown. However, she assured shareholders that GM’s EV sales showed growth last quarter and that the company plans to adapt production to market demand.
In a significant change, Barra announced that Cruise, GM’s self-driving unit, would discontinue its Origin vehicle, which had seen operations curtailed following a prior incident. Instead, Cruise will concentrate on utilizing the next-generation Chevrolet Bolt for testing in Texas and Arizona. This decision comes with a $600 million charge related to stopping production of the Origin in Detroit.
During an analyst call, Barra stated that adopting the Bolt for testing would alleviate regulatory concerns about the Origin’s unconventional design, which doesn’t include a steering wheel. This pivot is expected to reduce costs per unit and help optimize resources.
GM is also in the process of restructuring its joint venture in China with SAIC Motor due to ongoing losses, reporting a $104 million loss for the second quarter. In June, SAIC-GM significantly reduced production by 70% and delivered 26,000 vehicles, marking a 50% decrease compared to the same time last year.